Many of us welcomed the New Year with open arms. Now we’re almost through the first quarter of 2021 and hopefully, we’re all feeling just as jolly as we did on January the first.
There is certainly cause for optimism from those business owners who managed to weather the COVID storm. Predictions of a more open economy coming as soon as this summer are good tidings indeed.
But not all business owners are feeling that rush of confidence. Fewer companies are looking to expand, sales expectations are down and, despite the fact that borrowing money is really cheap right now with interest rates near historic lows, only three percent of businesses say they’re feeling bullish enough to take on additional debt. To put it in perspective, over 40 percent of businesses reported that they were temporarily closed during the past year.
The full effects of lockdowns nationwide are yet to be seen in many industries. And while some are predicting an economic boom once restrictions are lifted again, there are many industries that have been hit so hard and some businesses have closed their doors for good. Among those effected the most are industries of Travel and Tourism, Entertainment, and Small Business — especially the retail and restaurant industry. The growing list of long-standing institutions in the bar and restaurant industry is becoming a who’s who of In Memoria.
The federal government is hustling to get Unemployment Benefits extended under the Pandemic Assistance program, and in the meantime those measly $600 checks were sent out to help an increasingly uneasy population.
But on a personal level, what can be done to keep your head above water — even in the most challenging of times?
Savings and Saving
Have an emergency fund at your fingertips. An emergency fund is cash that you’ve saved up for the sole purpose of helping you maintain your financial obligations through emergencies that life deals out.
Aside from a Savings Account, it’s also a good idea to find other ways to save. As you can imagine, home utility costs go up and down depending on the season. Be mindful of your utility usage habits and find ways to cut down on gas, electric, and water bills.
A new wardrobe might be on your list of things to buy in the New Year, but the price tag on designer clothing from big labels and stores can add up quickly. Instead consider supporting your local small businesses and getting great deals on good quality items at the same time. Coming out of a very trying time, there will be some retail stores looking to gain your business by offering very attractive deals and discounts.
Get out of Debt
Getting out of debt is a good idea, whether there is a financial crisis on the way or not. The average American household carries over $15,000 in credit card debt alone. Not to mention mortgages, student loans, auto loans or other debt.
Don’t be tricked by the “call of the wild” which promises unreasonable returns. Now is not the time to gamble your finances away. A sensible middle ground of investing is the way to go. Look for investments that are based on real value and pay dividends and interest. Talk to a financial advisor for help and gudance..
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.
Member FINRA & SIPC.